These are some of the compliance related stories that recently caught my attention.
Corporate Disclosure, Social Policy, and Dirty Pool by Matt Kelly in Radical Compliance
[L]et’s use the Conflict Minerals Rule as the flagship example of a much broader bad idea in Dodd-Frank—using federal securities law to force social policy on corporations. Because as much as the Conflict Minerals Rule is an exasperating waste of compliance officers’ time (which it is), we have a whole host of other examples, too. This business of using securities law to score political goals is getting way out of hand. [More…]
An Insider Trader Caught On Tape Tells All by Jacob Goldstein in NPR’s Planet Money
A former accountant convicted of insider trading tells his story to our “Planet Money” podcast team: what he did, how he did it and why. Though he’s still struggling with that last one. [More…]
The Debt-Equity Choice When Securities Regulations are Scaled by Equity Values: Evidence from SOX 404 by David Weber and Yanhua Sunny Yang in The CLS Blue Sky Blog
The costs of complying with SOX 404 create incentives for non-accelerated firms to avoid crossing the bright-line threshold of $75 million in public float and retain their non-accelerated filer status. Because the threshold is tied to the value of firms’ outstanding common equity, such incentives potentially affect the financing choices of smaller firms. That is, when comparing alternative sources of external financing, the regulatory threshold is likely to make additional common equity relatively more costly and additional debt relatively less costly. Thus, for non-accelerated firms looking to access external capital, we expect the scaled requirements for SOX 404 to increase the likelihood of issuing debt and decrease the likelihood of issuing common stock. [More…]
Take It Easy – Ruminations on Corruption Scandals in International Sports by Tom Fox in the FCPA Compliance and Ethics Report
As I have noted this week, the world of sports continues to provide ample lessons to be learned for the Chief Compliance Officer (CCO) or compliance practitioner. Although we no longer have the sad sack Astros to kick around, there are many other candidates out there you can draw inspiration from for your compliance regime. For today, I want recap some of these lessons. [More…]